Scalability in Accounting: Adapting to Business Growth with Indian Outsourcing Partners
Outsourcing has become an inevitable practice in today’s globalized accounting business landscape. Companies around the globe are increasingly relying on outsourcing partners to manage their overall financial transactions, reduce costs, optimize tax & gain a competitive edge.
And, among the most renowned players in the outsourcing industry are Indian outsourcing companies that are known for their scalability, expertise & availability of cost-effective solutions.
Today, in this blog, we’ve discussed how Indian outsourcing partners can enhance the scalability of your business.
What is Outsourced Accounting?
Outsourced Accounting is the process where a business/company contracts with a third party to manage all financial transactions & bookkeeping activities. Such outsourcing partners oversee every aspect of your company and thoroughly help you with reporting, payrolling, accounts payable, accounts receivable, financial operations & other account-related activities.
Comparison of Different Outsourcing Models (offshore, nearshore, onshore)
| Aspects | Offshore | Nearshore | Onshore |
|---|---|---|---|
| Meaning | Outsourcing services to a distant country, often in a different continent. | Outsourcing services to a nearby country, usually within the same or a similar time zone. | Outsourcing services within the same country as the business. |
| Cost | Lower costs as the labor rates are cheaper | Moderate costs as it offers the possibility to be closer to customers yet not necessarily offer lower rates from local competitors | Higher costs as compared to other locations due to local labor rates |
| Cultural Compatibility | Potential for cultural differences and language barriers | Closer cultural alignment, reducing cultural barriers | Seamless cultural compatibility |
| Geopolitical Risks | High, due to different political climates and potential instability. | Lower than offshore but higher than onshore, with similar regional stability. | Low, as the political environment is the same. |
| Scalability | Vacancies can be expanded with the availability of a pool of talents | Vacancies can be expanded as a response to the availability of talent in different regional locations | May face a talent shortage locally |
NOTE: Geopolitical risks include policy shifts, international conflicts, political instability & economic sanction
Expanding Accounting Capabilities with Indian Outsourcing Partners
Are you planning to outsource accounting services? But, not sure, how to choose the best outsourcing partner. Well, you can consider Indian outsourcing partners to delegate all your outsourcing requirements.
Why India?
The global accounting services market was valued at $628.4 billion in 2022 and is projected to reach $1.5 trillion by 2032, growing at a CAGR of 9.2% from 2023 to 2032.
Particularly in India, the accounting industry is expected to grow at a CAGR of 6% from 2021, reaching $687.7 bn in 2023. This reflects the growing importance of accounting outsourcing companies in India.
To add on, here we’ve highlighted how partnering with Indian firms can help companies handle more accounting tasks efficiently and effectively, allowing for growth and better management of their financial processes.
1. Choosing the Right Indian Outsourcing Partner
Choosing the right outsourcing partner is indispensable for scaling your business operations. While hiring them, make sure you prepare a checklist of certain factors like -
- Years of professional experience in the respective niche
- Reputation & credibility within the industry
- Cost-effectiveness
2. Setting Up Processes and Communication Channels
In order to expand the accounting capabilities with Indian outsourcing partners, make sure you set up a clear communication channel. This will help your outsourcing partner to understand the critical company-specific processes & tools and maintain a significant level of transparency at all levels.
3. Ensuring Data Security and Confidentiality
According to WifiTalents, data breaches grew by 47% in the accounting sector. This adds concerns related to the confidentiality of personal information, which is of paramount importance. Therefore partner with a professional outsourcing partner that adheres to international standards like HIPAA or GDPR, depending upon the nature of the data being handled.
4. Latest Technology
Due to the advancement in technology, professional outsourcing companies are making waves in the world of accounting by implementing blockchain technology. Such advancements not only improve scalability in business but also provide security & transparency for financial transactions, keeping everything encrypted.
5. Managing Costs Effectively
Most of the companies often partner with Indian outsourcing companies as they offer significant cost savings in the long run. Moreover, in India, the labor costs are comparatively lower than in developed countries, resulting in substantial savings without compromising quality standards. And, further, this helps businesses to optimize their savings & strategically manage costs, exploring additional efficiencies through such outsourcing partnerships.
Future Trends and Challenges in Outsourcing Accounting to India
As businesses continue to explore outsourcing opportunities in India for accounting functions, several emerging trends and challenges shape the landscape:
1. Rise of AI and Automation
The use of artificial intelligence (AI) and robotization in accounting firms is growing at a breakneck. According to Grand View Research, the global artificial intelligence market size was estimated at USD 196.63 billion in 2023 and is projected to grow at a CAGR of 36.6% from 2024 to 2030. Accounting firms leverage AI tools to scrutinize voluminous data to identify trends, patterns & anomalies. This helps them make informed business decisions & improve the financial position of clientele.
2. Virtual CFO Services
In India, most of the bookkeeping outsourcing companies are also providing virtual CFO services. It's more like having a financial expert who looks at your finances, manages financial risk, makes strategic decisions, generates financial reports & importantly mentors MSMEs & startups. Through this, experienced outsourcing companies help clients make their businesses more profitable.
3. ESG Reporting
ESG Reporting is a prominent accounting framework used to assess the sustainable performance of a company & its impact on society. This is an innovative trend in accounting firms in India where professional outsourcing companies help clients by providing transparent and standardized information about their environmental, social, and governance performance.
The Final Words
To wrap up, whether it’s a small business, startup, or large-scale corporation, it’s truly an investment to partner with Indian outsourcing companies in order to improve the scalability of the business. This will not only ease your burden but also help you make informed business decisions under professional guidance for continuous growth. Want to outsource your accounting operations to trusted professionals?
Book an appointment with TVC & talk to our experts now!